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Oh my, what an interesting week for augmented reality, especially in the business front:

Nokia Beta Labs revealed Live View, a revolutionary mobile augmented reality application. Well, unless you consider Wikitude, Layar, Junaio and many other “AR browsers” that came out in the last three years. Nokia was once a leader in AR research, it’s a sad day to see them show off a product like that.

Paul Travers, the CEO of Vuzix, has been busy these days. Selling AR glasses to the military for one million a pop sounds like a good deal to me. Especially when that DARPA money helps fund a commercial version.

May 3 (Bloomberg) — Augmented-reality glasses made by Vuzix Corp. may allow soldiers on the ground to coordinate with unmanned drones in the air. Vuzix signed a one-year, $1 million contract with the Defense Advanced Research Projects Agency to develop glasses to work with military drones. Bloomberg’s Megan Hughes reports the technology may also have potential civilian applications. (Source: Bloomberg)

Go here to see the video and get a first person POV of the AR glasses in action.

This week’s video comes to us from Nokia Research, showing their indoor navigation solution. Coming from Nokia Research, one of the first bodies to look into mobile AR, this should be considered as no more than a teaser. It’s very cool and alluring with its 30cm accuracy, and its “where I put my keys” functionality, but not likely to be adopted anytime soon. Five years from now, Apple/Google will probably come with inferior solution which will be hugely successful. You can read more about the technology on GSM Arena.

I found this week’s video on Toby’s weekend “linkfest”. It’s one more example how augmented reality can upgrade almost any old board game, this time making “battleships” more interactive. As Toby rightfully states, there’s no need for two boards when AR is deployed, as the two players can be shown different views of the same board. Still, it’s a cool demo:

Here’s yet another amazing AR project utilizing the power of Kinect’s sensor. Tobias Blum and Prof. Nassir Navab of TU Munich used a Kinect to overlay CT data on a person in real time, transforming a big screen into a magic mirror. It’s also a good party trick for Halloween. More info here.

No doubt about it, this week was under the sign of Kinect. Dozens of amateur programers used the OpenKinect drivers to create wonderful, many times AR related, demos. These and more in this week’s linkfest:

Kinect hacking is nice, but the biggest news of the week is coming from Layar which raised another $14M. Follow the link to read a letter from Layar’s CEO Raimo van der Klein, on what it means and what’s next for Layar.

And here’s yet another video showing the power of Kinect. Created by Theo Watson in a single day, this is a very impressive skeleton tracker. How long will we have to wait till someone finds a way to combile AR glasses with Kinect?

While we augmented reality aficionados would like to believe that AR has hit its stride, the nascent technology is no where near the level of 3D movies and TVs. This all may change in the future, but for now the 3D movement far outweighs AR.

This isn’t so bad as I believe, and will try to explain, how the change to 3D TVs and movies will help augmented reality:

1) Augmented reality is just 3D unhinged from a screen

The first and most obvious reason is that augmented reality by its nature exists in a three dimensional space (though in its current iteration we often see 2D sprites hovering in the air.) So products like 3D movies, TVs, and games will help drive interest in bringing an immersive 3D experience like augmented reality to consumers, as opposed to the 3D view within a flat screen that current 3D offers. Why be stuck with a screen when you can enhance the whole space around you?

I’m having a hard time imagining what an augmented reality movie would look like. It seems extraneous to add that space in the theater to the story telling medium because that space is a part of your life rather than the story in the screen.

Plays on the other hand could benefit greatly from augmented reality. What 3D is doing for the movies, I could see AR doing for plays. Theater typically breaks the fourth wall during its performances, letting the audience in the secret or involving them, even if its just through thunderous applause.

So what if every seat had AR glasses (they could be a little bulky for a two hour experience right?) and the players interacted with this 3D immersive medium? The type of material presented in that format could be wildly expanded and new forms of storytelling could emerge.

Let’s be real. Ten years ago, someone with a PDA (Personal Digital Assistant for those that don’t remember the 90s) was considered pretty nerdy. Wearing one on your belt was the equivalent of the pocket protector.

Flash forward to 2010 and one of the big concerns for AR glasses is the style. Does anyone remember the early versions of the Blackberry? I felt like I was wearing a frisbee on my hip or that I had a side-holster with a six shooter in it. If it’s functional and not too bulky (i.e. – neck ache) then it’ll be a hit.

The 3D glasses we start buying for our TVs and games will help bridge that fashion gap. Who cares what you look like when you’re used to wearing them at home in front of the TV? Just convince Lady Gaga to wear a pair of bulky AR glasses as a fashion statement and Vuzix will be trying to make them bigger (which brings me to the thought that Lady Gaga is probably just dying to get freaky with some AR.)